Town Square

Guest Opinion

Original post made
on Mar 6, 2009

The local impact from the breakdown of the financial system is painfully obvious. Our outstanding schools are facing a 9 percent budget cut next year. Domus and the Pleasanton Hotel were longtime downtown anchors, and have recently vanished. Big companies in the Tri-Valley are laying off people or closing, such as Washington Mutual, Dublin Ford, EXPO Design Center and many others. Our idyllic community is bearing the brunt of a failed banking system that needs fixing.

Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 6, 2009 at 2:12 pm

Excellent points. The restoration of consumer confidence will most likely not occur until the rules of the game are revised and restored. No one wants to play games with cheaters.

FDR's first inaugural address sounds as familiar today as it was when first written: Web Link

"... we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return.

...

Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated.

...

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

...

there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live."

I paste the above not to imply that I fully condone FDR's programs, only to point out how similar the public situation and sentiment was back then to how they are today.

New to this forum for ~ month. Is Stacey a full time writer for this forum? Not trying all to be offensive but I see her name on here all the time on all the posts. I just can't imagine having that much time to comment on so man topics without being assigned to the forum as a paid employee.

Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 7, 2009 at 9:00 am

Vince,
I'm not a paid employee. I don't respond to all the posts, but I do read a lot. I'm not here all the time. I think that's an illusion because I write so much. Honestly, I have an equally hard time imagining how other people have so much time to use a Blackberry or other texting or email device.

Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 7, 2009 at 9:20 am

When bringing up the banking system, I think the guest opinion only gives a part of the picture. We have to remember that the US operates a fractional-reserve banking system and with such, certain deregulation is dangerous. It isn't just the Gramm-Leach-Bliley Act, it's that acts effect combined with fractional-reserve.

Web Link
"The Financial Services Modernization Act of 1999 would make perfect sense in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance; but in the world as it is, this "deregulation" amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly."

I guess I could be called conservative. By conservative I mean "sticking to the old ways". I think there's no need to make a change to a system that's been working well for decades so I question why the removal of certain protections took place in 1999 and earlier.

Web Link
"Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada....Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers."

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